Fund for secondary water source is ‘strong’

Published: Sunday, May 12, 2013 at 04:42 PM.

Assistant
county manager Dan Shaw said the county has set aside about $1.5 million for the project already, which would cover the design-build contract.

“We figure by this time next year we would have close to $3 million to put at (the project),” he said.

Shaw said the wholesale water rate hike was not done exclusively for this project, but for several projects, this one included.

Shaw said this project should be viewed as a continuation of the well fields. The same way it intended to pay for the wells through bonds; it will likely do the same in this scenario.

“We’re just continuing on that path,” he said.

Now the commission is slated to award the design-build contract in June. If all aspects of the project get on track — permitting, engineering, financing and transfer of land — then it could be finished within five years, Shaw said.

PANAMA CITY — The Bay CountyCommission hit the pause button last week on pursuing a secondary water source after commissioners expressed concerns about its financial impact. But the fund that will pay for the bulk of the project is “strong,” a finance official says.

The BayCountyClerk of Court’s office serves as comptroller, overseeing the county’s finances, and has already started reviewing the wholesale water system fund, which would cover most of the project’s cost. The project is estimated to cost $25 million.

The commission wants the secondary water source in case a hurricane or widespread flooding caused saltwater intrusion in lower DeerPointLake — the county’s only drinking water supply. This project would build a pumping station at the northern end of the lake, which wouldn’t be susceptible to such natural disasters.

In fiscal year 2012, the wholesale water system fund showed a net gain of $4.6 million. Its strength can be attributed to a water-rate increase dating back to 2007. Wholesale water rates saw a significant rate hike that year, increasing from 90 cents to $1.45 per 1,000 gallons.

“It is strong,” said Joey Rogers, the clerk of court’s finance officer, about the fund. “That healthy rate increase is doing what it was supposed to do.”

The surplus from the rate increase was meant to fund capital-improvement projects.

Rogers said he’s not seen anything that would make the secondary water source project cost prohibitive or unfeasible, but he would also like to spend more time reviewing it.

By way of comparison, Rogers pointed to similar funds that all lost money in fiscal year 2012: retail water and wastewater ($2.9 million); and industrial wastewater ($67,127).

Rogers said the annual independent audit of the budget praised the wholesale water system fund, however.

“It was noted that the wholesale fund was very healthy and doing better since it had its rate increase,” he said.

Nelson’s concerns

Commissioner Mike Nelson, however, expressed concern about the project’s financial impact. He’s most worried about the $5 million the county is expecting from the Northwest Florida Water Management District for the project.

The water management district pledged that amount when the county planned to drill wells as its secondary water source. That money will likely be rolled over to this project, but there’s no guarantee.

“I’d just like to get a little more assurance from them that they’re going to step up to the plate and help,” Nelson said. “That’s it in a nutshell really. That’s the biggest thing that’s bothering me.”

Nelson said if county staff felt comfortable with the project and the district guaranteed the $5 million in writing he would be satisfied.

But the county hasn’t submitted any definite plans to the water management district. It wouldn’t necessarily need to be a full engineering design, but at least some specifics on what the project would entail, said Lauren Engel, spokeswoman, water management district.

“An amount of money that large ($5 million) would have to be approved by the board,” she said, noting it would need to see a plan first to make sure the money was justified.

Commissioner Mike Thomas said the district has stood by the countythrough its trials and tribulations in seeking a secondary water source. He doesn’t think a written guarantee is necessary.

“If they’re not good for it, it’s not going to make any difference if we have it in writing,” he said. “If they’re not good for it, they’re not good for it.”

Thomas said the county’s been preparing for this project for years, and it’s financially doable.

“We’ve got the money. We’ve got ample money to start it,” he said.

Thomas also said the water management district has indicated it may provide more money down the road. He said there are other funding sources too, including state and federal dollars.

“There’s a lot of money out there, both cheap money and grant money when you start messing with water and sewer projects,” he said.

Thomas pushed hard to award the contract at last week’s commission meeting and was not pleased to be overridden 3-2. Now he’s most adamant that the project should not be delayed or, as he put it, “drug around.”

“Everybody’s got opinions, mine is we should move forward,” he said.

$1.5 million set aside

Assistant county manager Dan Shaw said the county has set aside about $1.5 million for the project already, which would cover the design-build contract.

“We figure by this time next year we would have close to $3 million to put at (the project),” he said.

Shaw said the wholesale water rate hike was not done exclusively for this project, but for several projects, this one included.

Shaw said this project should be viewed as a continuation of the well fields. The same way it intended to pay for the wells through bonds; it will likely do the same in this scenario.

“We’re just continuing on that path,” he said.

Now the commission is slated to award the design-build contract in June. If all aspects of the project get on track — permitting, engineering, financing and transfer of land — then it could be finished within five years, Shaw said.

“But there’s a lot of ifs along the way,” he said.

Shaw also said he didn’t think there would be any problem if the countycompleted the design phase, but waited a few years to implement it.

Expanded to five

Nelson also proposed this week to expand the pool of firms competing for the contract from three to five. The move puts the only locally headquartered company — Phoenix Construction Services Inc. of Lynn Haven — back in the running. County staff had scored the firm second-lowest out of five.

Nelson said none of the firms had pressured him for the contract.

“I sort of thought I would (get pressure) about a week or so ago, but I’ve not heard from anybody,” he said, noting the request for qualifications forbids firms from contacting commissioners.

Nelson said he felt “more comfortable” with all five firms vying for the contract and making presentations to the commission in June. And he’s confident the county will get its secondary water source without breaking the bank.

“I think it will work out. I just want someone to tell me it’s going to work out, you know, so I’m going to try to talk with the water management district next week,” he said last week.